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Increased brand awareness gives Primark wings in the U.S.

By Angela Gonzalez-Rodriguez

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Management

A year after taking the other side of the Pond, Primark is enjoying relatively strong brand awareness. The affordable fashion retailer is planning its expansion into the U.S. market.

Earlier this month, commenting the group’s figures and plans, Primark owner Associated British Foods PLC (ABF) said awareness of the Primark brand has grown in the U.S., as well as its footprint.

Primark counts today with five stores across Connecticut, New Jersey and Pennsylvania. A spokeswoman quoted by the ‘Wall Street Journal’ said Primark plans to open three new U.S. stores, in Burlington, Mass., Braintree, Mass., and New York’s Staten Island borough, and will expand its Boston store by 31 percent , to 92,400 square feet.

The U.S. expansion is part of a steady rollout of new stores by Primark, which now has stores in nine countries outside the UK and Ireland, the company said it plans to open a further 1.3 million square feet of space in fiscal 2017, an acceleration from last year, when it opened 1.2 million square feet.

Primark’s new stores “are still greeted with enthusiasm” across the Pond

“That new store openings are still greeted with enthusiasm by our customers says much for the capability of our buyers and merchandisers, who ensure that Primark remains at the forefront of fashion, but is also the result of our store designers making Primark an attractive and fun place to shop,” said ABF Chairman Charles Sinclair talking about its plans for the American market.

For the 53 weeks ended September, 17, ABF reported pretax profit of 1.04 billion pounds on revenue of 13.39 billion pounds, up from 707 million pounds on revenue of 12.80 billion pounds a year earlier.

ABF warned of the potential effects of Brexit and the resulting pound’s devaluation, explaining how its operating margins will be enfolded because the company pays for much of the clothing it sources from Asia in dollars. Nevertheless, Primark said it remains committed to maintaining its price leadership.

Market experts highlight how Primark’s expansion strategy substantially differs from that of other apparel retailers, such as Zara and Gap, which have taken a more cautious view on store expansion.

Primark’s underlying pre-tax profit, which strips out one-time charges, fell 19 percent to 231.1 million pounds for the six months ended October, 1.

Photo credits: Primania

Primark